SHARES in Arm Holdings rocketed after Microsoft said it would make future versions of its Windows operating system compatible with computer chips based on the company’s designs.

Microsoft has announced a version of Windows designed to run on chips made by Arm.

Arm, whose designs are licensed and made by other companies, rose 10½p to 482p, earlier hitting 534½p, after the software company announced the move allowing it to compete with Apple and the Google Android system used on smart phones and tablet computers similar to Apple’s iPad.

It is the first time Microsoft has announced a version of Windows designed to run on chips not made by the world’s biggest manufacturer Intel.

Arm-based chips dominate in mobile phone and tablet computers but Microsoft’s move opens the door for the British company’s designs to be used in desktop and traditional laptop computers, both potentially lucrative markets.

The announcement will also make Arm chips still more attractive to manufacturers looking to move into smart phones and tablet computers. The company’s chief executive Warren East said: “We are excited by the announcement, which marks a significant milestone for Arm.

“It will enable innovative platforms to realise the future of computing, ultimately creating new market opportunities.”

Smart phone and tablet computer sales have soared in recent years, threatening the dominance of traditional computers where Windows dominates.

Analysts warned, however, that Arm was unlikely to experience an immediate financial benefit. Investec’s Gareth Evans said it would be at least two to three years before Arm-based Windows machines will appear, although Arm will benefit from bigger royalties once they do because the chips used in more powerful computers command higher prices.

Arm shares have soared as rumours of the possible tie-up with Microsoft trickled out. The company has also been linked with possible bids from Intel and another chip maker, Qualcomm.